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CRA Penalties and Interest Charges for Corporate Income Tax Filings

Corporations that do not file income tax returns on time are subject to interest and penalties. These charges can be very high, and they can grow very quickly, making it is crucial to resolve these situations promptly.

In addition to charging penalties for not filing returns on time, the Canada Revenue Agency (CRA) can also charge penalties for not reporting income, making false statements or omissions on returns, misrepresentation, and for many other issues.

If You File Your Corporate Income Tax Return Late

There are late-filing penalties for corporations that do not file tax returns on time. While the deadline for filing corporate income tax returns depends on several factors, including the corporation’s fiscal year-end, the penalties exist regardless of when the corporation’s tax returns are due.

If a company does not pay the corporate income tax owing within two or three months of the end of a taxation year (depending on the type of corporation) penalties and interest charges will apply.

In addition, if an organization’s T2 return is not filed within six months of a company’s taxation year end, there is a penalty.

The penalty for filing a corporate T2 return late is 5% of the unpaid tax due plus 1% of this unpaid tax owing per month, to a maximum of 12 months. If a corporation has a recent history of late-filing, the penalty and interest charges are even higher.

Remember that inactive corporations still need to file income taxes every year, as they remain legal entities unless they are formally dissolved.

If you have not filed your corporate tax return on time, or if you have not paid the taxes owing, Farber Tax Solutions Canada can communicate with the CRA on your behalf and work to resolve your tax situation. Please contact us today.

Corporate Taxpayer Relief

There are options available for corporations that are unable to pay income tax owing. The CRA may, at its discretion, agree to waive interest and penalty charges in some instances. These situations include CRA errors or processing delays, extreme financial hardship, and extraordinary circumstances (such as serious illness or natural/man-made disaster).

Farber Tax Solutions can help if you are having difficulty paying corporate tax debt. We have successfully assisted companies and individuals across Canada in dealing with CRA interest and penalty charges. Our team will review your situation, determine the best course of action for your corporation, and communicate and negotiate with the CRA to resolve your tax problem. Contact Farber Tax Solutions today to set-up a free consultation with our team.

Farber Tax Solutions Helps You at Every Step of the Way including:

1| Organizing: We analyze all documents and communication, to fight the CRA on your behalf

2| Audits: We assist you with audits and ensure proper conduct by tax authorities

3| Appeals: We can prepare a Notice of Objection, clarifying your standing with the CRA

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Farber Tax Solutions is a tax dispute resolution firm serving clients across Canada. Our team of ex-CRA professionals at Farber Tax Solutions provide effective tax solutions and the tax lawyers from our affiliate: Farber Tax Law, ensure that you get high-quality litigation services and legal advice. This ensures that you get holistic and robust tax solutions. We have built our reputation on outstanding client service and are committed to helping you succeed in your tax matter.

*Farber Tax Law is an independent law firm affiliated with Farber Tax Solutions in Ontario, Canada **Past results are not necessarily indicative of future results and the amount recovered will vary according to the facts in individual cases.